Ind. Decisions - 7th Circuit decides one Indiana case today

The appeal in this diversity suit
governed by Indiana and Michigan law presents issues of
contract and property law (the venerable doctrine of waste).
The plaintiffs, affiliated real estate firms that we’ll pretend
are one and call Bitler, sued affiliated oil companies that
we’ll also pretend are one and call Marathon. Bitler seeks
damages for harm caused by Marathon in attempting to
clean up pollution at gas stations that Bitler had leased to it.
According to Bitler’s law firm, the suit sought more than $9
million in damages. * * * Later its expert witness estimated Bitler’s
damages at $17.4 million. But the final judgment was for
only $269,000, and Bitler appeals. * * *

It would not make sense, or conform to the reasonable
expectations of the parties, to limit liability for waste or other
misconduct by a tenant simply because a lease originally for
a specified time—that is, an estate for years—had to be extended
for an indefinite period to allow a response to unforeseen changes. Those changes were the new EPA regulations
in the late 1980s, which required extensive clean‐up of
the properties. Neither Marathon nor the judge gave any
reason for interpreting the Michigan statute literally in such
a case.

So the judgment awarding damages for waste regarding
the four Michigan properties is vacated with directions to
the district court to double those damages. The dismissal of
the contract claims relating to the canopies is affirmed, but
the dismissal of the contract and waste claims relating to the
buildings on the properties in Adrian and Michigan Center
is reversed and that aspect of the case is remanded for trial.
AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED WITH DIRECTIONS.